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While Oracle has wooed PeopleSoft investors and has even raised its offer since it was first tendered, PeopleSoft CEO Craig Conway has repeatedly said the price is too low. On Wednesday he got new ammunition announcing preliminary second quarter earnings of between 13 cents and 14 cents a share, which bested the companys earlier guidance by about 17 percent.
"One thing everyone agreed to from the beginning is that PeopleSoft could not possibly make its quarter earnings," Conway said in a conference call. "Gartner [Group Inc.] immediately [after Oracle announced its intent to buy the company] issued an alert for its clients to stop purchasing PeopleSoft. Im happy to report many did not."

In the preliminary earnings call this morning, PeopleSofts Conway talked about a money-back guarantee that PeopleSoft offered second-quarter customers that could amount to a poison pill.

"It is not a refund program," said Conway. "The condition for receiving the compensatory award would be a change of control within a specified amount of time, where the controlling company would cease support of PeopleSoft products.
"The multiple varies depending on scale," said Conway. "It could be two times to five times of the original license."
While the money-back program ended June 30, PeopleSoft is considering an extension.
Oracle spokesman Jim Finn was not impressed by PeopleSofts earnings report.
"PeopleSofts claims to have beaten analyst expectations are hardly surprising, since by their own admission over half of their new license revenue resulted not from ordinary course sustainable business but from one-time gimmicks such as two to five times money-back guarantees, favors from business partners, and other tactics from a company desperate to put up numbers for a single quarter," Finn said, in a statement. "We believe that five straight quarters of declining results are a better indication of the underlying condition of PeopleSofts business."
Lisa Vaas contributed to this story.